So we quite possibly could have a dynamic where if we are in this soft landing zone, we could see increased activity. Ultimately, we are in the tickets business activity based in both channels and benign economic conditions augur well for both wealth and investment but also for the investment bank. And part of the reason I wanted to talk about the integrated firm today was because the two segments are working together will bring inevitably additional growth opportunities in the firm. We have folks that have mobilized around the enterprise are now in a position to talk to clients across the product spectrum and to bring in additional business. We have a big business, as you know, in Europe and in Asia. So if economic conditions are better than the expected, which is that Europe will struggle in China might as well.
If we do any better than that, we would expect to see some increased activity coming out of those regions, too. So it’s not just a U.S. proposition but a global one as well.
Dan Fannon: Great. Thank you. And you mentioned margin within the wealth chain or wealth segment will consolidate around the mid-20s here in the near term. Can you maybe unpack some of the inputs that will drive that outcome?
Sharon Yeshaya: Certainly. I worked through that, I think, Dan, when I actually tried to explain it in the script. So the premise in terms of the growing wealth management margin, again, is about the conversion to the advice-based model over time. Of course, individuals will have different pieces, right? But we have three different channels that we’ve talked about. We’ve talked about self-directed. We talked about workplace. We’ve talked about advice. From the self-directive side, we will continue to attract those clients and those that might be interested in advice, we’ll see it as we have different ways to give people a sense and a connection to FA. So we’ve talked about that. On the workplace side, we continue to get new participants, new corporate relationships and that as we educate people with the wellness offering, et cetera.
And we’ve seen evidence of this to bring people yet again to that advice-driven model. And the fee-based flows, as you see those, those will help us grow the asset management line. Then you can break it down again, the transactional line we’ve talked about, you’re going to have new products and you’re going to have a deployment of this cash that’s been sitting on the sidelines that we’ve talked a lot about, the dry powder that could impact either the transactional line or the asset management line. And again, we’re encouraged by the signs that we’re seeing in NII. That too suggests that we are seeing as of right now, it looks like that cash, that frictional level of cash is stabilizing. So I think you have the drivers in each of those lines as we think about the revenue side.
And then as you think about the expense side, those we are looking for place to invest and gain from the scale of those investments and that will be a part of the objectives that Ted laid out when you see $10 trillion of assets.
Operator: We’ll move to our next question from Ebrahim Poonawala with Bank of America. Your line is now open. Please go ahead.
Ebrahim Poonawala: Thanks. Good morning. Welcome, Ted. Maybe just going back to the strategic update, going to Slide 13, where you sort of lay out very nicely the transformation over the last 15 years. As we look forward over the next three to five years. I was wondering if you can help fill in the blanks around strategically, I mean M&A has been a key pillar of this transformation as we think about both organic and inorganic one on the M&A side, give us a sense of just where you see deal making happening over the next few years. We saw a big private asset deal being announced on Friday. And so would love some perspective there. And then I think the second thing you mentioned in terms of wallet share on the investment banking side, if we can unpack that a little bit in terms of how you expect to achieve a greater wallet share. Thank you.
Ted Pick: Thanks. Good to talk to you — with you. It’s an interesting question. You’re effectively asking what will over the slide look like three, four years from now. We believe that the revenue mix will toggle around. There could be periods like in 2020 or ’21, where the investment bank is really firing on all cylinders. Again, early economy type of activity, and that could grow again towards 50%. And we could have other periods where as we continue to invest in the wealth and investment management piece of the firm, that could expand further. I think where we are right now is a revenue and profitability matter where 60% of the firm is in wealth and investment management is not a bad place to start. I think the main message I want to convey today is that while there is a change in leadership after 14 years of James stewardship, there’s not a change in strategy.
We have undertaken and integrated, if you really go back into time and then include Mesa West five different acquisitions. And I think the view inside the house is that’s good for now. We can execute our business with the growth plans in front of us and it feels organic. Now that having been said, there are ideas that come across the transom and we naturally would take a look. But I think for the next period, the view that I would have is that we really work to grow the organization and to do so organically and efficiently. I think on the margin, one comment might be that we could work on sweating the income statement a bit more. There’s a little more work to be done post integration where there could be inefficiencies along the income statement.
